These rockers know exchange rate band

Written by Online.wsj.com - NEIL SHAH

The rock band Metallica has made a living for the past 30 years belting out anthems such as The Four Horsemen apocalyptic and Enter Sandman. Now, which reveals one of the pioneers of heavy metal bands is something else: the European crisis.

Cliff Burnstein, the manager of the band, touring Europe accelerated to avoid being a victim of the financial problems of the continent. Now that the crisis appears to spread more affluent countries such as France, Burnstein concerned about a collapse of the euro, making it difficult to hire promoters Metallica in the 17 countries sharing the currency to pay its cache.

Instead of doing a European tour in 2013, as planned, Metallica will launch a "European vacation" in mid-2012, which includes appearances at festivals Rock Im Park and Rock Am Ring, Germany, and recitals in Britain and Austria.

"Look, I'm no economist, but I have a title, so that helps," says Burnstein. "One has to wonder what is the best time to do what, when and where," he says.

The global music industry has been affected by the decline in record sales, the prohibitive prices of tickets to concerts and the weakness of the developed economies. Now, financial fears make up the large rock rebels seek to protect their pockets.

The Red Hot Chili Peppers, another group managed by Burnstein and his partner Peter Mensch, also advanced their performances in Europe, having recently launched their first tour in four years in Latin America. About 75% of income comes from touring band outside the United States, says Burnstein.

Anthony Addis, manager of the British alternative rock band Muse and others acknowledge that fluctuations have hurt non-US customers, which made many tours of Europe and do not want to get paid in dollars.

Some rockers learn after stumbling. Duff McKagan, former bassist for Guns N 'Roses, spent $ 40,000 in expensive suits in Italy did not know the equivalence between the Italian currency, then the lira and the dollar. The musician then took business courses at the University of Seattle, began writing about finance for Playboy magazine and has just launched a wealth management firm for rockers: Meridian Rock Capital Management LP.

After the 2008 financial crisis, rock bands and their representatives pay more attention to previously ignored issues such as exchange rates and economic trends before signing contracts with foreign developers. Eight months before Metallica takes the stage in Germany, Burnstein decide whether the group should be charged in dollars, euros or a combination of both currencies. If the exchange rate hurts the income of Metallica, the purchasing manager hedges that ensure a suitable rate. Sometimes they raise the price of tickets to offset exchange rate losses, although this strategy avoids Burnstein. "Nobody is looking for an exchange operation to make money, but do not want to be a loser," says Burnstein.

What most concerns him is the euro. "In the coming years, the dollar will strengthen and the euro will weaken, and if so, I take that organizing more of these concerts (in Europe) now, because they will be more profitable for us," he observes.

Sometimes Burnstein calculations coincide with the wishes of its customers. In September, for example, Red Hot Chili Peppers toured South America, an increasingly popular destination for rock bands thanks to the rise of local currencies facilitates the payment of generous fees in dollars. Vocalist Anthony Kiedis and bassist Flea, great surfers took advantage to go to a beach about an hour from Rio de Janeiro.

Given the bleak European rock bands turn their attention to areas with stronger currencies, such as South America, Asia and Australia. "We are a U.S. export, like Coca-Cola," says Burnstein. "We seek the best markets."

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